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Sunday newspaper share tips

By This Is Money
Updated: 08:51 EDT, 20 February 2011

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We round up the key stock picks from the Sunday newspaper business sections: this week, Go Ahead Group and Hammerson

Mail on Sunday

Insurance broker Brightside has developed a niche in transport, insuring taxis, minibuses, motorbikes and white vans, and has earned the focus of Midas this week.

›› Read the full Midas column

Sunday Telegraph

Bus and rail operator Go-Ahead Group (1408p) reported record numbers of passengers in its interim results, leading to an upgrade to full-year expectations.

The shares are yielding a prospective 5% in the current year, rising to a very attractive 5.8% in 2012.

Revenues in the six months to December increased by 6% to £1.13bn, primarily due to like-for-like passenger revenue growth of 7% in bus and 9.1% in rail. Pre-tax profits rose to £50.7m from £50m.

The group also said that it had secured a £275m credit line to refinance an existing facility, giving it the firepower to make any acquisitions. Net debt was also down.

The shares are trading on a June 2011 earnings multiple of 12.3 times, falling to 11.6 in 2012, which looks attractive. Buy.

Mining investment vehicle Polo Resources (5.48p) is a high-risk play on the mining sector. It currently owns about 30% of Caledon Resources, the Aim-listed coal group that is in a bid situation, and about the same stake in Bangladeshi-focused coal group GCM Resources. However, it is the group's smaller iron ore investments that look exciting for the long term.

In November, Caledon received a bid from China's Guangdong Rising Asset Management at 112p a share. Polo owns more than 62m shares in Caledon, which are worth about £70m at the offer price.

Approval in China is holding up the bid, and if it does not materialise shares will fall. If the deal goes through the company will have significant cash to make new investments.

Polo has also made a 5m US dollar investment in unlisted MinFer Holdings, which is engaged in exploration for iron ore in Brazil. These projects could have major upside if successful. A speculative buy.

Sunday Times

City Editor James Ashton doesn't tip shares per se, but he talks up the prospects of two firms this week: Hammerson and Informa. Hammerson is a property group with shares described as in the 'best buy' category by Ashton. While this has been the case since a £584m rights issue which cut its debt two years ago, sales growth of 5.3% in the third quarter last year has added to the allure. A 4% lift in the dividend at 16p a share is predicted in its annual results tomorrow (Monday), too.

Informa, too, is an events organizer and journal publisher which has significantly reduced its debt. A £242m rights issue in 2009 was responsible. Debt is now at £800m and the share s are up 38% on the year. The Sunday Times says there is a good chance of a 17% rise in the full-year dividend this week. And Informa even has a chance of breaking into the FTSE 100 for the first time.

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